Policy and technology: a "longue durée" view

Random thoughts on policy for technology and on technology for policy

The future of startups is no startups

Where will we be in 10 years when it comes to startups and scaleups in Europe?

Well, let’s start by looking backwards. Where were we in 2006?

In 2006 web 2.0 was just starting. I can still remember my then boss circulating an email in late 2005 about the importance of the yet unknown site called Youtube. Startups were certainly NOT on the agenda of policy-makers. Still under the effect of the dotcom bust, I remember some senior civil servants referring to web companies as “parasites” of the telcos and the content companies, which were considered the “real companies”.

How things have changed. Today every country has a startup strategy. Politicians love to be in the middle of startuppers. So by 2026, we should expect startup issue to become dominating throughout all government policies, right?

No, I think ten years from now startups will disappear from the policy agenda. But not because of another forthcoming dotcom bust, or another disappointment with the economic impact of these companies.

Precisely for the opposite reason. Startup will not be important because the startup culture will have become pervasive. There will no longer be a distinction between incumbents and startuppers, because incumbents will incorporate the values of startups: business model experimentation, failing forward, disruption.

This is a bold statement, designed at stirring discussion. But it is also based on today’s weak signals.

At the macro level, large companies are trying to integrate the startup culture: by launching incubators, corporate venture capital, acquisitions, hackathons, self-disruption initiatives, and hosting co-working spaces. The example of how the sharing economy has disrupted strong established business model is too prominent to ignore.

At the individual level, there is no longer such thing as an “employee culture”. Firing is cheaper and easier than ever, and has happened even in the public sector during the austerity measures. Salaries are increasingly performance-related. There is widespread recognition that no job is safe. There is a fine line between a fixed post, a temporary post, a self-employed post and creating a company. It’s a continuum rather than an opposition between safety and risk.

In short, every company is changing into a startup, and every worker into an entrepreneurs.

Will we get there? Is it actually desirable to get there? What needs to be done to get there in a way that maximizes public value?

These are just some of the ideas to be discussed at the forthcoming SME Assembly, to be held in Bratislava next November 23rd-25th . But the discussion has already started in the Linkedin group. Look forward to hearing your ideas.

Why isn’t there an easy way to do this? #wouldntitbeniceif

I want to be able to draw immediately a pie chart of the structure of a word document. Ideally, in a dynamic way that allows me to click on a section and have it expanded. I had to make my own calculations in excel to do it.


New report: the European #Crowdfunding market is loosing ground – with or without the UK

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In the context of our crowdfunding study, I am reading the recent market study on European Alternative Finance by the Cambridge Centre for Alternative Finance.

The overall data are surprising, in a negative sense. As you can see in the chart, Europe is now lagging far behind America and Asia.

  • The European market at 5.43 bn EUR is much smaller that the Americas (33.58bn) and the Asian (94.61bn).
  • It is growing more slowly (+92% against +248% and +366% respectively).
  • The pace of European growth is decreasing (+151% in 2014, 92% in 2015) while others are accelerating.
  • Even considering only the market leader in each continent, the UK grew much slower than the US and China.

I know that it is not correct to put in the same bucket North and South America, Asia and Pacific, but that’s the way it is in the report. And in any case, it does not change the story.

Is freer circulation of #data likely to lead to winner-takes-all markets?

If we free up more data, and enable data to circulate more, should we expect the emergence of new oligopolies such as Google? Is there a rich-getting-richer effect on data, and is it more likely to happen the more freely data circulates? Or is this concentration effect more likely to happen in a context where data does NOT circulate freely?

The analogy comes from a 2003 Clay Shirky comment on blogging, where he suggests that greater freedom leads to power law distributions:

In systems where many people are free to choose between many options, a small subset of the whole will get a disproportionate amount of traffic (or attention, or income), even if no members of the system actively work towards such an outcome.


There’s a thin line between groupthinking and scientific consensus

So, the evaluation report of IMF is out, and says all sorts of negative things about how the financial crisis in the Euro area was handled; basically that the stability of the Euro area was more justified by group thinking than by economic evidence.

This is a nice complement to the Chilcot report on the Iraqi war, recently published in the UK. They certainly shows the importance of policy evaluation. Taken together, both reports appear as a serious hit at “Blair-style” left wing parties, which are both pro-austerity and pro-american.

I haven’t read the report yet but I am fascinated by this accusation of group thinking as opposed to evidence. In fact, Kuhn shows well how, even in hard sciences, group thinking is an integral part of the scientific process. The evidence about the centrality of the sun was available long before Copernicus. The “paradigm shifts” are not simply caused by the evidence accumulated, but by a cultural shift of the scientific community.

So is the accusation legitimate? What is the line between group thinking and scientific consensus, especially in soft sciences? And where does the Washington consensus stand in this continuum?

Do we need better property rights on #data to enable greater sharing and reuse?

Raw data are not covered by IPR, while curated database are.

It is not clear who owns the raw data, across different sectors of the economy. As a farmer, data gathered by tractors are managed by the tractor provider, but who owns them? As a bank, data on ATMs technical functioning are managed by the ATM machine builder. As a consumer, data on my banking transaction are managed by the bank. And so on…

But property rights are the basis of capitalism. If you don’t establish ownership, you can’t buy and sell stuff.

So if it’s not clear who owns the data, then they will be not shared or sold or reused. Unless of course they are totally open data.

Interestingly, a similar problem is happening in science. One of the main barrier for scientists to share data is that there is no established format for data citation (as opposite to publication citation) and no practical application of it, so they will not gain but only loose by sharing data.

Who owns my farm’s #data? #bigdata #agrofood

Big data is changing agriculture, moving towards the so-called “precision agriculture”.
Almost all new agricultural machinery is equipped with sensors that monitor the field. Drones are taking photos of the field to map their growth.
Traditional technology producers, such as John Deere, are equipping tractors with sensors and offering cloud based analytics to farmers based on these data.
New agri-tech startups are gathering data and providing data services for precision agriculture.

Moreover, as we wrote before, Business Insider reiterates that in agriculture.

the real potential is what happens when the data from thousands of tractors on thousands of farms is collected, aggregated, and analysed in real time.

But who owns these data? Who can share them and analyse them?  Typically these data are gathered by sensors in the equipment and managed directly by the ATPs. Monsanto’s equipment generates about seven gigabytes of data per acre.

It is not clear to what extent farms own these data, and to what extent ATPs and other third parties can access and reuse the data. Contracts are difficult to interpret and understand by the farmers.

My impression is that there are players with competing interests: farms who want to use these data to increase productivity; ATPs who can manage and merge datasets from many farmers to improve their services and expand their business; and third parties such as startups which could use data held by ATPs to develop new services.

In the US, there is a Agriculture Data Coalition which aims at putting farmers in control of the data; there is even a transparency evaluator that helps farmers assess whether their contracts put them in control of the data. There is also an interesting global agriculture open data initiative.

Some questions emerge:

  • Who owns the data today? who controls access?
  • Should these data be controlled by the farmers, just as the MIDATA initiative has done for banking data?
  • Are farmers equipped with skills and market power to understand the contracts and negotiate with ATPs?
  • Are ATPs likely to use these data to expand into new segments of the value chain such as farming and data analytics?

In other words, is the market efficient?

Should companies share more their #data?

big data sharing

A minority of EU companies use big data: only 6,3% according to our IDC/Open Evidence report on the data market.

According to BCG, companies tend to use their data internally, without sharing them with third parties:

The majority of organizations we surveyed prefer to have control over the development of new products and services. They frequently contract with third parties to help speed development, but full-fledged partnerships or alliances are still a relatively uncommon arrangement.

But according to experts, companies should learn to share their data.

the Data Economy refers to much more than any one enterprise or organization making better use of data. Discreet use cases and applications of Big Data must be part of a larger whole. In the Data Economy, entire industries will operate and markets function all through the intelligent use and sharing of data.

This does not mean necessarily sharing data openly, but normally through APIs. However, the OECD goes further into this, and suggest exploring a “data commons”.

Non-discriminatory access regimes, including data commons or open access regimes, should be explored, as a means to support the production of public and social goods without requiring governments or businesses to pick winners (either users or applications).

So my question is: do we have evidence that companies should learn to share more their data? What are we missing out because of this lack of sharing?

Barriers to scaling-up across Europe: real life stories

Cross-posted from Linkedin


One of our recent policy focus is on startups and scaleups, and in particular on what should be done at EU level to support them. This is also the main topic of the online consultation on the Startup Initiative, open until the 31st July.

One of the issues the EU faces is that there are relatively few high-growth innovative firms, and that they are reluctant to expand across borders. The fact is, as of today only 23 % of new and young SMEs (up to seven years old) export within the EU. Why is that?

I have been talking with entrepreneurs, gathering experiences of barriers to scaling up across border in the EU. One reason that came up is the different practices in the EU countries when it comes to payments.

Here are their stories told anonymously.

Italian SME “Societá”, a reseller of professional products, aimed to cut costs by bypassing intermediaries and buying directly from German suppliers. Unfortunately, this proved impossible because German suppliers want to be paid upfront, while the Italian SMEs receive payments from their client with a delay. Additionally, the banking system is designed around these local practices,  so they are unwilling to cover upfront costs.

Spanish SME “Empresa,” after much effort, finally succeeded to get a contract with a public body in Italy. Everything went well until the payment was due: the payment was made one and a half year late, which for an SME this is huge. Traditional contingency plans don’t work. Banks don’t provide factoring for invoices with foreign governments. Legal requirements about timely payments are much more difficult to enforce across countries, and lawyers discouraged “Empresa” to submit formal payment request as they would have little impact unless it went to court, which “Empresa” is not willing to do.

In other words, in some countries such as Italy, it is normal to be paid late, and the whole payment practices is that everyone in the value chain is paid late. But then foreign suppliers are wary of making business there, because their value chain relies on prompt payments. This is a major barrier to cross border expansion, even more because it often comes as a total surprise.

Here are some official data about payments by government. Italy stands out.

Screen Shot 2016-06-09 at 13.04.43

I am sure there are many others: what are your real life stories?


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